Signature Assignment: Strategic Management Research Project Presentation

Running head: STRATEGIC MANAGEMENT RESEARCH JOURNAL PART 4 1

STRATEGIC MANAGEMENT RESEARCH JOURNAL PART 4    4

Strategic Management Research Journal Part 4

Strategic Management

Short term vs. long term goals

The long-term goals and the short-term goals are measured in terms of the delivery period. The organization's short-term goals are set for fulfilment within a financial year, while long-term goals are achievable beyond two financial years. The company's first long-term goal is to generate a higher profitability and earnings per share within the next five years. The second long term goal is to develop the best team to help the organization achieve its objectives. The final long-term goal of the firm is to become a global business leader. The organization's short-term goal is to increase its venture into other areas such as clean water, housing, and food to meet the basic needs of the customers (Noria, 2020). The second goal is to improve the quality of the products to attract more clients and retain the current customers.

Mergers and acquisitions in the last 3-5 years

The expansion of Caterpillar Inc is a result of continuous mergers and acquisitions. The most recent acquisition of the company was the purchase of the select assets of Marble Robot Company on June 29, 2020. The acquisition of the company was in line with Caterpillar's automation objectives by the management. The acquisition has boosted the workmanship of the company by acquiring expertise from Marble Robot Company. The firm's total equity increased from 14,080 million to 14,629 million as a result of the acquisition. However, the firm also hurt its goals (Caterpillar Inc., 2020). The net income of the firm dropped from 2,998 million to 6,093 million. Another negative aspect is the decrease of the earnings per share from 10.85 dollars to 5.51 dollars. On the other hand, the organization benefited from the economies of scale after the recent acquisition of Marble Robot Company.

Most critical merger or acquisition

The most critical acquisition by the company was in 2010. Caterpillar Inc acquired Bucyrus international at the cost of seven point six billion dollars, becoming the most expensive acquisition by the organization. The three metrics used to measure the firm's performance include revenue, net income and earnings per share. The revenue of Caterpillar Company rose from 42,588 million in 2010 to 60,138 million in 2011. In addition, the net income of the organization increased from 2,700 million to 4,928 million in the two financial years. The last item was the earnings per share that rose from 4.15 dollars to 7.4 dollars in the subsequent financial year. The acquisition proved to be the turning point of Caterpillar Company (Caterpillar Inc., 2020). The acquisition of Bucyrus international allowed Caterpillar Company to venture into the mining business, thus increasing the revenue. Caterpillar became one of the major mining companies in the United States after acquiring Bucyrus international company.

Caterpillar’s operational plan for global strategies

The company uses different approaches to meet the needs of the customers in different geographical markets. The multi-domestic approach allows the company to manufacture and deliver products to customers depending on their various needs. The subsidiary companies located in different areas are independently managed to suit the needs of both local and international customers. The strategy helps the management penetrate the different market at a cheaper cost by using the local resources to meet the customers' needs in the region. The organization achieves global performance by using a market growth strategy in Asia and Africa because of the unexploited markets in the two continents (Noria, 2020). On the other hand, the intensive market growth helps the organization expand its presence in competitive markets such as the United States and European nations.

References

Caterpillar Inc. (2020, June 29). CATERPILLAR ANNOUNCES THE ACQUISITION OF ROBOTIC EXPERTISE. Cat.com. https://www.cat.com/en_US/news/machine-press-releases/caterpillar-announces-acquisition-of-robotic-expertise.html

Caterpillar Inc. (2020). Caterpillar, Inc. (CAT) income statement. Yahoo Finance - Stock Market Live, Quotes, Business & Finance News. https://finance.yahoo.com/quote/CAT/financials?p=CAT

Noria. (2020, August 19). Caterpillar CEO outlines aggressive plans for growth and returns. Reliable Plant. https://www.reliableplant.com/Read/26190/Caterpillar-CEO-outlines-plans